Navneet Munot, CIO, SBI Mutual Funds, in an interview with ET Now talks about markets and stocks.

How would you interpret the current market environment? Is it typical consolidation or is it a typical sign of fatigue? Markets are not going anywhere and volatility historically has always bought the market down, it has never taken the markets up.

Yeah, you rightly said volatility is an animal we have to learn to live with and whatever - fortunately or unfortunately - depends on how you use volatility to your advantage or get swayed by it. I think one can use volatility to its advantage and we believe - given what is happening in rest of the world - volatility is likely to continue in all the financial markets, not only in equity but in fixed incomes and currencies and commodities also. This is a new world. No point in time in last 30-40-50 years a large part of the developed world hit the problems that it is facing now.

On other side you have economies like China and India which are going to drive the global growth. So it's a very very different kind of world and lots of structural reasons that will keep the growth subdued in the developed world while the drivers are going to India and China. So the way capital is going to move the aging population on one side and a positive demographics of India on the other side. So it's going to be a very interesting, it's a new world.

But that is also one of the factors why Indian markets are at 16000 plus. The fact that we are one of the best performing market in the region and at global level, one would imagine that all the factors you mentioned either they are baked in or they are built in.

Not necessarily, of course in terms of may be the levels where the markets are probably one can call it a fairly valued. They are not as undervalued as it was a year or a year an half back when let the Sensex was 8000 or 10000. But even from here on if you assume a corporate profitability growth of let say 20%-25% - take few percent here and there - probably we can sustain. Given that GDP is going to grow at 8.5% or so for next couple of years, the kind of corporate profitability growth we can have, even the earnings growth can give you far better return than probably what you can have on the fixed income side.

I think we need to move away from what is going to happen in next quarter or two quarter but take a slightly longer term view where we believe that over the next several years this is a structural story. I think all the cylinders are firing. Whether we look at the consumption - both the rural as well as urban, at the infrastructure, we believe that private capex we are just at the tipping point where most of the capacities are getting exhausted in several industries and we are going to see return of private capex which is going to be another driver. So all the cylinders are firing. So you believe in this growth of course the markets are going to deliver you those returns.